Biomedical Engineering Reference
In-Depth Information
conceptual framework, grounded in self-determination theory, which managers at
other pharmaceutical (or any other innovation-intensive) fi rms can use to
design
their
own grassroots innovation processes. We also discuss a multitude of possible future
research directions in this area, with high dual impact to both academia and business.
4.1
Introduction
Pharmaceutical fi rms face a period of unparalleled turmoil. Major societal, techno-
logical, and regulatory challenges require fi rms to quickly respond to a rapidly
changing environment. Healthcare practitioners and payers demand that fi rms bring
new, better, and cheaper therapies to market while providing extensive clinical data
to prove their superiority and safety. All these trends put considerable pressure on life
sciences fi rms' innovation productivity and performance. Open the annual report
from any major life sciences fi rm and sustainable
innovation
fi gures prominently as
a key imperative for value creation and business growth. Academics also agree with
practitioners and consider innovation and therapy creation a key research area for life
sciences fi rms (Stremersch
2008
; Stremersch and Van Dyck
2009
). Unfortunately,
despite this recognition, in the last decades, the suboptimal productivity of pharma-
ceutical fi rms' R&D engines is a widely recognized challenge to the industry's fate.
The cost per new molecular entity (NME) approved by the regulatory agencies to
enter the market has been increasing for decades with R&D investments of the phar-
maceutical industry rising at an average compounded rate of 12 % per year and the
output in NMEs stagnant (Munos
2009
). Even though this trend seems to have
reversed in recent years—for example, approvals of NMEs by the FDA hit a 15-year
high in 2012 (Osborne
2013
)—the issue on how to improve R&D productivity is
considered
the
key challenge faced by the pharmaceutical industry nowadays (Paul
et al.
2010
; Betz
2005
). Garnier (
2008
), former CEO of GlaxoSmithKline (GSK),
states that the historically low R&D productivity has been caused by the increasing
size and complexity of the pharmaceutical R&D organization. According to Garnier
(
2008
), “if not creatively managed, complexity can cause passionate engagement
and courageous risk-taking to give way to risk aversion, promises with no obliga-
tion to deliver, and bureaucratic inertia” (p. 72).
Pharmaceutical fi rms are obviously not alone in showing bureaucratic inertia,
which may stifl e innovation and creativity. In a widely cited study of sustainability
of innovation in large and mature fi rms, Dougherty and Hardy (
1996
) conclude that
most organizations indeed exhibit a top-down approach to innovation, emphasizing
control over fl exibility and creativity. Such approach, however, frequently fails to
engage and energize innovative employees and creates strong barriers to successful
innovation (Dougherty and Hardy
1996
).
Innovation theorists have for long suggested alternative sources of innovation,
such as employees, consumers, and other partners (e.g., academia, suppliers, manu-
facturers; see von Hippel
1988
). More recently, innovation and strategy scholars
have converged around the notion that top-down vision, planning, and goal setting
need to be complemented by other sources of new ideas, such as
grassroots
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